No, I'm Not Retired

By Gary Silverman, CFP®

A few years back, I wrote an article about my planning for retirement. Many people seemed to have missed the “planning” part of it. To this day I still run into people (including clients) that say, “I thought you were retired”. Not yet.

Still, I am preparing for it; and more importantly, my firm is prepared for it. We began the preparations close to 15 years ago, and for the last many have been to a point where if I dropped dead, operations would go on just fine without me. Probably better.

This makes sense. After all, planning is my profession, so you’d think that I’d plan for my profession. However, that’s not the case in a lot of firms. In the next 10 years, an estimated one-third of financial folks like me are planning to retire. All these folks in one way or another provide planning or investment advice to their clients. Yet one in four haven’t put together a succession plan. And anecdotally, I’m pretty sure many others have woefully inadequate ones.

Likely some are planning to sell their firm to a larger one. This assumes a larger one wants them. Over the last many years, it’s been a sellers’ market; but trends like that have a habit of reversing themselves. Plus, how would you, the client, feel about getting sold. Typically, the sale includes the seller hanging around for a year or two to smooth over the transition. Still, things will change—perhaps for the better, perhaps not. Plus, even if the firm you are using is gobble up, there’s no guarantee that the new firm will want you as a client when the dust settles.

Another popular option is to truly not have a succession. When the advisor retires, clients are either given a list of firms they might want to try out or they are left on their own. This could be because the adviser never wanted to turn over the reins, or just never got around to it. You, the client, are left to find a suitable replacement. You might want to ask them sooner than later for that list.

Then there are those advisers who choose to do an internal succession. While no two people or groups of people will run a firm the same way, this offers much better continuity for the clients. But this choice comes with a need to prepare a lot longer before the transition than the other two. Being an adviser at an investment management or financial planning firm is a lot different than running one.

If you are getting professional advice, you have the right (and I’d say an obligation to yourself) to ask the adviser you are working with what plans they have made for when they, whether by retirement, death, or life circumstances leave the profession. They should have an answer. If not, why the heck are they giving you advice?